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Top Engineer Behind Google’s Rise Will Lead Grail In Cancer-Test Quest

Wed, 02/10/2016 - 11:53

Grail wants to develop a blood test that detects early stage cancer in seemingly healthy people, an ambitious and daunting proposition that I wrote about in detail last week.

After a month in the public spotlight without an official CEO, the new biotech company has named to the top spot not a cancer expert, but a top architect of some of Google’s most important products who says he is motivated by “purpose and passion” after his wife died last year from cancer.

Jeff Huber will become CEO of Grail after 12 years as a top engineer at Google—now called Alphabet (NASDAQ: GOOG)—where he spent much of his time building or running the search, advertising, and mapping businesses. He also worked on Google Docs, the free online alternative to products like Microsoft’s Office applications. He spent the last two years at Google X, the company’s skunkworks group that spawned its life science projects such as the data-gathering contact lens and the long-term health study called Baseline.

Huber isn’t joining Grail out of the blue. In 2014 he joined the board of directors of Illumina (NASDAQ: ILMN), the world’s largest genome sequencing company, which spun out Grail last month. On the Illumina board he had a front row seat for the early work and promising data that led to Grail and its $100 million-plus financing round.

He has a more personal connection, too. His wife Laura died of cancer last year after being diagnosed with metastatic disease. Huber described her as healthy; until she developed gastrointestinal irritation, she had no symptoms, and she had no risk factors such as a family history of the disease. By the time doctors pinpointed the cancer, it had spread throughout her lymph system.

(Disclosure: Many years ago Huber helped finance a magazine project I was involved with. I didn’t know about his involvement and had never met him until our phone conversation Tuesday.)

Huber’s personal story is motivation for him, and he says he wants to find others motivated by the same “purpose and passion,” as he describes it, which is not an insignificant point in highly competitive Silicon Valley, where Grail will be recruiting for both biomedical and informatics jobs.

“We have to have the best understanding of cancer biology in the world,” he says, in addition to the best deep sequencing expertise and the best informatics team in the world. Huber says he will need to appeal to people motivated by something beyond “strictly how much money they’ll make.”

Detecting cancer early is an emotional appeal, but there is limited evidence that looking for cancer in healthy people actually saves lives across broad populations. Grail will have to lean on its brainpower and its resources—Google Ventures has joined Series A backers Illumina, Arch Venture Partners, Sutter Hill Ventures, Bill Gates, and Bezos Expeditions to invest more than $100 million—to show its tests not only can flag the presence of cancer in a seemingly healthy person, but also help pinpoint where it is in the body, and whether it poses a danger.

Some cancers, like certain prostate cancers, are better left alone or kept under observation, because the biopsy, surgery, or drugs to treat them cause more harm than good, on the whole. The problem is understanding which early cancers will be aggressive and dangerous. Grail says it aims tackle that problem. “I believe Grail is going to be at leading edge of understanding, and enabling the understanding, of cancer biology,” says Huber. “But there’s so much we need to learn and know.”

Huber says some of the techniques Google and other companies have turned into everyday technology—search ranking, voice recognition, real-time route suggestions within maps—Grail will apply to cancer diagnosis. With machine learning, he says, the aggregation of quality data can begin to suggest patterns and correlations before a human or a programming algorithm might suggest them. We know already that the BRCA1 and BRCA2 genetic mutations are highly connected to more prevalent and aggressive breast and ovarian cancers. As Grail gathers more cancer data that its machines can read and analyze, Huber says, the shift “will drive an exponentially faster understanding of biology.”

Grail says its test could be available for a limited number of people—those who have had a potential tumor flagged by a cancer screen and need to have it confirmed—within a couple years. After that, it wants to move quickly to screen large swaths of healthy people. If Grail’s blood test had been available a few years ago, Huber says, perhaps his wife would still be alive today. That is a powerful motivator to push hard to develop a test. It should also motivate Huber and colleagues to build a body of evidence around their test to show that the benefits outweigh the harms.

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12 San Diego Life Sciences Startups to Watch in 2016

Tue, 02/09/2016 - 13:37
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A whole new crop of life sciences startups are germinating in San Diego, which is good news for the regional cluster of established companies that are focused on innovation in biotechnology, medical devices, healthcare technologies, and medical diagnostics. Renewal is crucial to sustaining and growing an innovation cluster like San Diego’s life sciences community.

But identifying a dozen local startups to watch in the life sciences has been a far more challenging task than selecting the 12 tech startups that made Xconomy’s list of local tech companies to watch in September.

For one thing, life sciences startups typically take far longer to go to market, with regulatory requirements that often take a decade or longer to meet.

Life sciences startups also require far more invested capital just to demonstrate a proof of concept. A group of venture investors that has invested $40 or $50 million in an early stage biotech has essentially validated the company and its technology. It’s my intent here to highlight the other, less visible, life sciences startups.

So the criteria used here were intentionally fuzzy. Most of the companies on this list were founded in the last five years. Most have raised less than $25 million from investors. None of them are public companies.

San Diego’s Amplyx Pharmaceuticals, a frugal drug development company focused on improving existing cancer and anti-viral drugs, would have been a good candidate to make the list. But Amplyx raised $40.5 million from several venture investors in November. (In the preceding nine years, Amplyx had subsisted on $7.7 million in grants and some angel funding.) Crinetics Pharmaceuticals, which scavenged lab equipment for six years, fell off the list in the same way—after raising $40 million.

Some companies made the list based on the strength of their startup leadership. Avelas co-founder Roger Tsien was a 2008 Nobel Prize winner in chemistry for his discoveries in fluorescing peptides. Phil Baran, a co-founder of Sirenas (previously known as Sirenas Marine Discovery) and a professor of chemistry at The Scripps Research Institute, was named a MacArthur fellow in 2013 for his work in synthetic chemistry.

Some companies made the cut based on the strength of their board members, who are often also investors or well-connected to venture investors. Dan Bradbury, the former CEO of San Diego’s Amylin Pharmaceuticals and an active biotech investor, is on the board of both DiaVacs and Renova Therapeutics.

Some made the list based on their innovation. CEO Michael Newman, who is the CEO and lone employee of Decoy Biosystems, said he founded the company to revive some very old research exploring the potential of using killed bacteria to spur the body’s immune system to fight cancer. “Today, cancer immunotherapy is the hottest field in the world,” Newman said. “And what people don’t realize is that it was invented in the 1800s.”

One of the most surprising discoveries that resulted from my quest to identify some of San Diego’s most-promising startups was the sheer number of early stage companies that are germinating here.

In my effort to cast a wide net, I talked with a number of life sciences investors in San Diego. I met with Kara Bortone, a scientific scout and portfolio manager for Johnson & Johnson Innovation and the JLABS incubator in San Diego. I talked with service providers who work with early stage biotechs. Biocom, the San Diego-based industry group, provided a spreadsheet that listed more than 40 local life sciences startups.

By the time I was done, my list had close to 80 companies.

And then the great winnowing began, followed by some immediate second-guessing. As one VC investor put it, “I had no idea there are this many new companies in town. How come you didn’t include [my portfolio company]?”

 

 

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West Coast Bio Roundup: Tessier-Lavigne, Twist, Unity, Grail & More

Fri, 02/05/2016 - 16:27

The biggest news on the West Coast this week came from Stanford University. The school has lured decorated neuroscientist Marc Tessier-Lavigne away from New York’s Rockefeller University to be the 11th president on The Farm, as Stanford is often known. It’s a return to the West Coast for Tessier-Lavigne, who had risen to chief scientific officer at Genentech after many years at the University of California, San Francisco and Stanford. Xconomy has an East Coast perspective on the move, and what it means for the biotech scene in New York City, where Tessier-Lavigne worked to boost the local biomedical and entrepreneurial profile.

Meanwhile, in a story posted yesterday, Xconomy examined Grail, the recent spinout from Illumina that aims to launch a blood test in three years to find previously undetected cancers, even microscopic tumors, in seemingly healthy people. Grail wants to pull off the incredibly ambitious feat—identifying minute amounts of tumor DNA floating in a patient’s blood—while proving that screening healthy people will do more good than harm.

Also in the roundup this week, KaloBios Pharmaceuticals protested in the Bay Area while its former CEO Martin Shkreli pleaded the fifth before Congress. A new Bay Area company, Unity Biotechnology, outlined its plan to treat “diseases of aging” by killing dormant cells. And San Diego’s ViaCyte consolidated its embryonic stem cell program for Type 1 diabetes by merging with a rival. All this and more, so let’s get to it.

—Unity Biotechnology has been working under the radar on the puzzle of cells that go dormant—a state called senescence—and appear to be driving so-called “diseases of aging.” To coincide this week with the publication of research from the Mayo Clinic, which Unity has licensed, the Novato, CA-based firm launched with an undisclosed amount of funding from Arch Venture Partners, Venrock, and others. It plans to develop small molecule drugs that kill senescent cells. The startup has programs aim to treat osteoarthritis, glaucoma, and other conditions, but the first tests in humans could be years away.

—San Diego-based ViaCyte is merging with Johnson & Johnson’s Janssen BetaLogics, a deal that consolidates the bets J&J has made on the two rivals leading the field of stem cell-derived therapy for type 1 diabetes. ViaCyte also disclosed early results from a phase 1 study, which is believed to be the first human data from a stem cell-based treatment for diabetes.

—Synthetic DNA maker Twist Bioscience of San Francisco is being sued by Agilent Technologies for alleged intellectual property theft. The complaint alleges Twist CEO Emily LeProust, a former Agilent employee, stole technology and poached employees for Twist, as first reported by the Wall Street Journal. Twist responded with a statement that labeled Agilent’s charges “an obvious attempt to stifle competition.”

—The San Francisco biotech accelerator Indie Bio held a demo day Thursday for its latest class. Fourteen companies presented short pitches, working on lab-grown food substitutes, acne treatments, technology that aims to sequence DNA, RNA, and proteins at once, and more.

—Avalanche Biotechnologies (NASDAQ: [[AAVL]]) of Menlo Park, CA, said it would buy another gene therapy company, Annapurna Therapeutics, in an all-stock deal. Avalanche is using 17.6 million shares to buy all of Annapurna—formerly known as AAVLife. Annapurna CEO Amber Salzman told Xconomy the merged … Next Page »

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4 Worst-Case Scenarios That Make the Case For Disaster Recovery

Fri, 02/05/2016 - 12:40

It’s a topic frequently heard in board meetings and splashed across the news: storm-related data loss and downtime trigger threats to our IT environments. For instance, last winter in New England caused a scare among executives and IT professionals alike. Record-breaking snowfall and increased risks to regional business data created a huge buzz about the need for inclusive disaster recovery strategies.

As important as this conversation is, a related truth is even more eye-opening: most disasters in IT aren’t due to bad weather, but instead attributed to human error. Common mistakes, disgruntled employees, and malicious attacks by hackers are some of the risks that plague data centers, in addition to the storms and bad weather over which we have no control.

No matter the threat, you need to understand your business’s risk landscape, especially in anticipation of another winter predicted to bring natural disasters, and in the constant battle against employee errors and malicious acts from inside and outside the company. Be aware of these worst-case scenarios that make the case for a solid business continuity and disaster recovery strategy:

1. Ransomware brings down your business. Here’s an example that demonstrates the power of preparedness. One of our partners worked with a catering company that fell victim to a ransomware virus. With the partner’s advice, the caterer had prepared for this kind of emergency with a backup solution that allowed it to identify and restore encrypted files and folders within an hour – saving the company $40,000 in data loss and production time.

With that in mind, ask yourself what your goals for disaster recovery are. Do you have priority files or applications your IT teams should restore first to speed recovery? Do you have a goal for recovery time, should a ransomware virus occur? Evaluate how often you want to create backups and how long your IT functions can realistically be down. For example, if you decide your company will create backups every few hours, you’re also agreeing that in the event of a disaster, you’re okay with losing any work that occurs within those few hours. Is that acceptable, or do you need more comprehensive business continuity to maintain access to customer information and documentation and to avoid losing deals and revenue?

2. Human error disrupts business continuity. Disgruntled or error-prone employees can wipe away important data and cost you millions of dollars in productivity and downtime. For times like these, it’s important to proactively prepare for the worst. Do you need a file restore solution? Would local or off-site virtualization suit your needs best? Regardless, you should consider these questions, among others, to determine the best plan of action. That might even mean considering a hybrid solution through a partnership with a cloud provider for backup. In this case specifically, you must also consider the provider’s capabilities before committing to a partnership.

3. Hurricanes cause critical data loss. More than 500 of our customers in the Northeast could have been at a standstill after Hurricane Sandy. However, because they were ready, those companies continued running their businesses from offsite locations or from the cloud. Some of your business’s most critical data likely lives across a mix of hardware and software, or in Software-as-a-Service (SaaS) applications. For example, you might use Salesforce to house your leads and customer information. Since Salesforce is not actively backing up your data, this practice holds an infinite amount of risk for your business when that data goes unprotected. These threats can surface in the event of natural disasters, and some data may never be recovered. A solid backup plan can relieve some of the stress that comes from using these applications.

4. Lightning strikes… twice. We had another end user who was struck by lightning – twice – but the company prevented the subsequent outages from hurting its business both times. Some businesses are not as lucky, even in more likely scenarios that don’t involve recurring lightning. That being said, you should carefully plan and frequently test your disaster recovery strategy. Planning for disasters becomes much simpler if you prepare for likely scenarios. Which weather-related incidents are common in your area? Which projects do you consider a priority should downtime occur? While you can’t always predict what’s going to happen, you can prepare for the probabilities. By assessing these potential problems, you can help your team choose the best backup strategy.

Planning for disasters – weather-related or otherwise – is simple once you assess your risk landscape and goals for disaster recovery. Through careful planning and an understanding of the worst-case scenarios, you can disseminate a comprehensive strategy across your organization, continually evolving as you learn from mistakes.

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One Writer’s Strategy for Avoiding Information Overload

Fri, 02/05/2016 - 05:00

This week one of my favorite podcasts, WNYC’s Note to Self, is featuring a project called Infomagical. Every day the show is sharing new challenges designed to help listeners cope with information overload.

We all know that feeling of being so far behind on the e-mails, texts, articles, and all the other stuff our digital devices are shooting at us that we’re unable to focus on our real goals at work or at home. Infomagical is an attempt to help people banish that feeling.

One challenge in the project is about the virtues of monotasking, as opposed to multitasking. Another extolls the calming effect of deleting unused apps from your smartphone. Another is about opting out of the day’s social-media memes, and a fourth focuses on the value of face-to-face conversation, sans devices.

Tens of thousands of people are participating in Infomagical, including me. Most of the tips so far have been great. But the truth is that I conquered information overload in my own life a few years ago.

I didn’t do it by cutting back on the amount of content I consume. I don’t think I’m any less of an information junkie than most of my colleagues in the worlds of journalism, academia, entrepreneurship, and innovation. But I’m not stressed by all the data coming at me. Most of the time, I feel clear-headed and ready to deal with whatever challenges and opportunities life sends my way.

I think that’s because of the system I’ve carved together for sorting incoming information into buckets, where I don’t have to see it or think about it until the appropriate moment.

I didn’t invent this strategy. Staying organized—putting things where they belong—is one of the first tips you’ll get from almost any productivity or self-help guide, from David Allen’s Getting Things Done to Marie Kondo’s The Life-Changing Magic of Tidying Up. But you won’t find my system in any book, mostly because it depends on a quirky hybrid of apps, gadgets, cloud services, and personal habits.

In honor of Infomagical, I thought I’d try to spell out my strategy for staving off information overload. Some of these ideas have popped up in my past Xconomy columns, so they might be familiar to longtime readers. But this is the first time I’ve put them together in one place.

1. I Carefully Curate My Information Sources

The simplest way to avoid information overload is to control the flow. I have a regular information-gathering routine. Every morning, over breakfast, I skim the New York Times and the Boston Globe on my iPad, saving interesting stuff as I go (see Step 2). Then I go for a run for about an hour. I use that time to catch up on the latest podcasts in my queue—see my list of favorites here.

Then I head to work. There, I check Twitter and Facebook to see what my friends and colleagues are sharing. But I generally try to save my work time for, you know, actual work. I don’t go back into active information-browsing mode until late afternoon.

That’s when several of my favorite e-mail newsletters usually show up in my inbox—for the curious, that includes Dave Pell’s Next Draft, the Nieman Lab Daily Digest, the New York Times’ What We’re Reading, Today’s 5 from This, Pocket Hits, and Caitlin Dewey’s newsletter. I read those and save the good stuff for later. And occasionally I go directly to a favorite news, politics, or tech site like FiveThirtyEight, The Verge, Vox, or Xconomy to see what’s on their front pages.

Note what I don’t ever do: I don’t watch any live, broadcast television and I don’t listen to broadcast radio. Sure, I have favorite TV and radio shows, but I get them on-demand at convenient times through Apple TV or the podcasts app on my phone. Seceding from real-time radio and TV feels like a huge win to me, since I don’t have to endure loud commercials or sit through stories that aren’t relevant to me. I’m my own programming manager.

2. I Save Almost Everything for Later

Gathering information and actually ingesting it require two different mindsets. I find that it’s way more efficient to stay in one mode or the other.

When I fire up the New York Times app or check out the Boston Globe over breakfast, I really do read the interesting articles. But after that, I mostly just save stuff for later. If I tried to read every cool article the moment I found it, I’d never get any work done.

For the most part, I skim enough of an article to determine whether I want to read it later (sometimes the headline suffices), and I put it into my reading queue. My favorite app for this is Pocket. I wrote a whole column about that back in 2014. You could do the same thing using Instapaper, Readability, or the Reading List feature in Apple’s Safari browser. Facebook now has a nifty Save Link feature that lets you save articles, sites, or videos shared by your friends.

But if I’m saving everything for later, when does “later” come? For me, it’s at night, after dinner. Typically I spend 30 to 60 minutes each evening reading the stuff in my Pocket list, and saving or archiving it as I go.

The evenings and weekends are also when I … Next Page »

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Improving Odds for Women in Tech? Take Notes from Biotech

Thu, 02/04/2016 - 10:59

At our entrepreneurial support organization, the Council for Entrepreneurial Development (CED), we often joke about adhering to the proper dress and catering code for our networking events: jeans and beer for tech; suits, wine and cocktails for life sciences.

But there is more to these superficial differences between the two networks serving 1,200 entrepreneurial companies in the Research Triangle Park region of North Carolina. Simply put, there are many, many more women attending the life science events. It’s been that way for years.

And that got me thinking. For all the talk about improving diversity and inclusion in tech, the real-life example of success in biotech, especially for women entrepreneurs, offers some clues on what it may take to change the trajectory in IT. Here’s my list of key observations that impact inclusion, based on experience and a number of conversations I’ve had with female leaders in the life science industry:

Culture. I’m not talking about the ability to take risks—that’s true for startups, no matter if it’s the latest app company or a novel medical device. I think this is more about the nature of science, which requires a high degree of collaboration, and a tradition of seeking advice from peers to validate results. “I have always thought gender was a neutral matter—it never helped, and hopefully, never hurt,” said a female biotech company president who asked not to be named. “My focus has been on finding great people with relevant interests,” she said. By necessity, biotech companies have to build teams with diverse experiences and perspectives, work habits developed early in research labs and academia. IT companies can benefit by thinking more about team-building, and less about reinforcing a culture of “star” performers. Women, in particular, are put off by workplaces that pit co-workers against each other for recognition and career advancement. A little collaboration can go a long way.

Pipeline. When I was in high school many years ago, there weren’t many girls enrolled in AP biology classes. That’s changed in a single generation. The US Department of Education’s Office of Civil Rights reports that girls now equal or exceed the number of boys enrolled in high school biology and chemistry classes, and, as of 2010, are awarded more than half of all PhDs nationwide. While women are still not starting biotech firms at equal rates as men, they are closing the gap as they become better prepared. College programs have been effective in attracting women into life sciences, but participation of women in other STEM programs—physics, engineering, and computer science— is at about only 25 percent. Is there a way to use the same pathway that led to such dramatic increases in participation in the natural sciences to boost enrollment in technology-related fields? The lack of qualified women in the tech job market speaks to the importance of investment in these types of education initiatives to keep women interested in pursuing a career in what remains a stubbornly non-traditional academic field.

Training. Careers inside large pharma, often a precursor to a biotech startup, offer women scientists the opportunity to gain experience in commercialization, finance, and clinical trials. Christy Shaffer, PhD, now a general partner at Hatteras Venture Partners, became CEO of Inspire Pharmaceuticals after a diverse career at the former Burroughs Wellcome. “As an international project leader, I was able to learn a broad skill set that was instrumental,” she said. “I ultimately became CEO at Inspire and was convinced to do so by all the male board members.”

Shaffer says she has benefited from … Next Page »

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Blood Simple? Grail’s Cancer Screening Quest Faces Tough Questions

Thu, 02/04/2016 - 08:30

[Corrected, 2/4/16, 2:05pm. See below.] Three weeks ago the world’s biggest genomic sequencing company, Illumina (NASDAQ: ILMN), unveiled a spinout called Grail to make blood tests that could spot all kinds of cancer in seemingly healthy people, perhaps as soon as 2019.

If you know anything about the history of screening healthy people for cancer, you’re right to be skeptical.

The people behind Grail can sympathize. “I was the in-house skeptic,” says Rick Klausner, Illumina’s chief medical officer since 2013. “I told Illumina, ‘Don’t go near it.'”

Klausner, who has also run the National Institutes of Health’s National Cancer Institute and was the top global health official at the Bill and Melinda Gates Foundation, has changed his tune.

But from conversations with Klausner and many others in the field of cancer research, treatment, and prevention, it’s clear that the scope and audacity of Grail’s plans will require measurements and analysis that stretch the understanding of biology, as well as strategies that run counter to much of the current thinking in public health.

“In the past we’ve made promises to the public that didn’t go well,” says Scott Lippman, director of the University of California San Diego’s Moores Cancer Center, speaking about the cancer medical field. (He is not affiliated with Grail.) “Given the molecular complexity of cancer and its premalignant origins, this is a big promise to say we’ll take a drop of blood, tell you if you have cancer, where it is, and how we might cure it.”

Grail launched last month with more than $100 million committed from Illumina, which is majority owner, Arch Venture Partners, Sutter Hill Ventures, Bill Gates, and Bezos Expeditions, the umbrella organization for Amazon.com founder Jeff Bezos’s extracurricular interests and investments.

Illumina warned investors its earnings per share would dip by 15 cents this year because of its Grail investment. It’s only a 3 or 4 percent drop, based on Illumina’s own estimates, but it’s tangible.

Grail has yet to name a CEO. An announcement could come soon. So it was Klausner, a Grail board member, who spent time on the phone with me last week to explain how Grail intends to develop a blood test that combs through the entire genomes of healthy people for the faintest traces of cancer—even tumors that are too small to cause symptoms or be detected in other ways.

Grail must also prove to doctors, patients, health regulators and insurers that its high-tech detective work actually results in better outcomes for patients. The need to make people’s lives better cannot be overstated. “The major challenge in early cancer detection is that there is always harm to some degree, no matter what the screening test,” says Lippman. “So the amount of benefit you have to show must be even higher.”

For decades, many clinicians, medical societies, and advocacy groups like Susan G. Komen have urged healthy people to undergo regular testing for various cancers. Screening saves lives, goes the mantra. Problem is, most tests have made it into wide use without first undergoing the long-term, randomized trials that many researchers believe are the definitive way to show that a test actually saves lives rather than, for example, uncovering tumors that were never destined to spread or otherwise harm the patient.

What’s more, screening can hasten death or injury through unnecessary biopsies, surgeries, and drug regimens for people wrongly diagnosed or whose cancer might never have progressed.

Take, for example, the prostate-specific antigen, or PSA, screen that was once a staple of men’s annual checkups. At best, one in 1,000 men avoids death from prostate cancer after taking the test, according to U.S. Preventive Services Task Force, a volunteer group of medical evidence and prevention experts overseen by the U.S. Agency for Healthcare Research and Quality (AHRQ).

But of those 1,000 men, 30 to 40 will develop erectile dysfunction or incontinence, two will have a heart attack or other serious cardiovascular event, and one will develop a serious blood clot—all from the cancer treatment. These numbers don’t even count complications from invasive biopsy. Given this unfavorable balance of benefits and harms, the Task Force now recommends against routine use of the test.

“The point of screening is to reduce suffering and death, not just to find more stuff,” says Jennifer Croswell, medical officer at the AHRQ.

So here comes the liquid biopsy: a run-of-the-mill blood draw to catch rare bits of DNA and similar molecules shed by a patient’s cancer cells and analyze the mutations in them. Liquid biopsies are starting to gain acceptance as a way to help doctors care for patients already diagnosed with cancer—to help guide treatment based on the tumor’s genetic profile, for example, or to monitor a patient’s response to a drug regimen or surgery.

But is there enough cancer DNA floating around in the blood to red-flag microscopic tumors in otherwise healthy people? Even if Grail—or its competitors in the cancer screening race—could produce a test that was 100 percent reliable at detecting cancer (a statistical impossibility, but let’s just say), could it distinguish between a slow-growing, non-threatening tumor—a turtle, as Croswell puts it—from a fast-growing, dangerous cancer—a rabbit? And could the test makers eventually prove their tests are reducing suffering and death, not just finding more “stuff”?

Grail says yes to all of the above, and company officials say the first … Next Page »

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5D Robotics Raises $5.5M to Commercialize Technology for Vehicles

Thu, 02/04/2016 - 05:40

Carlsbad, CA-based 5D Robotics said it has raised $5.5 million in a seed round from private investors to accelerate the commercial development of its automation technology in such sectors as industrial heavy equipment, mapping, and inspection. The investors were not identified.

5D Robotics, not to be confused with Berkeley, CA-based 3D Robotics, was founded in 2009 by CEO David Bruemmer and colleagues from the Idaho National Laboratory. Until now, the company has funded its operations through government contracts, although Bruemmer said founders, friends, family, have provided some funding, along with angel investors.

5D specializes in automation technology for vehicles, saying its “innovative software supports navigation, mapping and localization, search and detection, and dexterous mobile manipulation and various other robot behaviors for unmanned ground and air vehicles.”

The company says it has developed a commercial module that can be easily installed and reconfigured to bring robotics innovations to forklifts, scissor-lifts, and other industrial equipment to automate operations and increase safety and efficiency. In a statement earlier this week, the company said, “5D solves position and navigation down to the centimeter level, allowing vehicles to park side by side, indoors, outdoors, and in the snow, fog, or rain.”

In an e-mail, Bruemmer added, “The same modules we are developing for those vehicles are also now going onto automotive, drones, and low-speed electric vehicles.”

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ViaCyte Reports on Stem Cell Diabetes Trial, Absorbs BetaLogics

Thu, 02/04/2016 - 02:00

[Corrected 2/8/16, 11:20 am. See below.] In a deal that consolidates its position as a leader in developing a stem cell-derived treatment for diabetes, San Diego’s ViaCyte says today it is absorbing its chief rival, New Jersey-based Janssen BetaLogics.

[Clarifies that the packet is filled with engineered stem cells, not embryonic stem cells] The asset deal comes in conjunction with the first clinical data from ViaCyte’s lead product, an implanted packet filled with pancreatic progenitor cells (stem cells that ViaCyte has engineered to develop into fully differentiated pancreatic cells) that sits under the skin of a patient with type 1 diabetes and produces the insulin the patient’s own body cannot produce.

While others have undertaken similar efforts in recent years (Cambridge, MA-based Semma Therapeutics raised $44 million last year to advance its own approach through proof-of-concept), ViaCyte is believed to be the first to reach clinical trials with a stem cell-derived therapy for patients with type 1 diabetes.

“There really is only one competitor in this field who has been working as long as we have, and have made similar innovations, and that is BetaLogics,” ViaCyte CEO Paul Laikind said yesterday in an interview.

“Besides removing a competitor,” Laikind said the consolidation with BetaLogics “does bring a lot of expertise that will help us as we work through the inevitable challenges” of advancing the technology.

ViaCyte says its agreement with Janssen Biotech, which is part of Johnson & Johnson, gives ViaCyte rights to all BetaLogics’ assets, patents, and “know-how” in the field of metabolic disease, including diabetes. Key BetaLogics scientists also will be invited to work for ViaCyte, although Janssen will keep them on its payroll for two years under a “secondment agreement,” ViaCyte CEO Paul Laikind said.

Combining BetaLogics with ViaCyte also consolidates Johnson & Johnson’s investments in both companies. ViaCyte has received a total of $20 million in financing from Janssen and J&J, or nearly a quarter of the $81 million the San Diego company has raised in venture capital. The California Institute for Regenerative Medicine has committed another $56 million to ViaCyte, and the Juvenile Diabetes Researach Fund (JDRF) has awarded $13 million in grants, Laikind said.

ViaCyte also disclosed preliminary results from its initial phase 1 trial.

Data from the study, which began at UC San Diego in late 2014, show that stem cells, engineered to become pancreatic cells in ViaCyte’s bio-engineered packet, can grow into insulin-producing beta cells 12 weeks after the packet has been implanted.

ViaCyte’s preliminary results are encouraging, according to Thomas J. Kieffer, a professor of molecular and cellular medicine at the University of British Columbia in Vancouver who is not involved with ViaCyte, but has worked with BetaLogics and specializes in developing innovative therapeutic approaches for diabetes.

In an e-mail yesterday, Kieffer wrote, “I see this as a very important milestone and am very excited regarding the potential of this approach.”

Kieffer’s view was echoed by Derek Rapp, president and CEO of the JDRF, which has supported ViaCyte’s R&D. In a statement, Rapp said the data, “while preliminary, are encouraging, and move us closer to our goal of a world without type 1 diabetes.”

Type 1 diabetes is a chronic, life-threatening condition that occurs when the immune system attacks the … Next Page »

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Is 2016 the Year Virtual Reality Platforms Take a Magic Leap?

Wed, 02/03/2016 - 18:14

Try as he might, Madrona managing partner Tim Porter could not get Sachin Deshpande to share much of anything about Magic Leap.

The two were on stage last week at a virtual reality conference in Seattle. Deshpande is senior director of product management at Qualcomm Ventures, an early investor in the Florida augmented reality company, which Tuesday announced a $793.5 million funding round. Alibaba Group, a new investor, led the round, which also included new backers Warner Bros., Fidelity, JPMorgan Chase, and Morgan Stanley. Prior backers including Google and Qualcomm also participated.

Deshpande, Porter, YB Choi from Vulcan Capital, and Seattle-based angel investor Charles Fitzgerald share enthusiasm for virtual and augmented reality with a growing group of investors—more than 200 were actively placing bets in the sector last year by one count—but they also expressed some skepticism and uncertainty about what will actually catalyze a new industry to substantiate the hype.

And let’s be clear at the outset. From a funding perspective, there’s Magic Leap—doing something that looks incredibly cool with holograms projected on the real world—and there’s everyone else in VR. Magic Leap has captured 72 percent of the roughly $1.9 billion invested in virtual reality in the last 25 months.

Fitzgerald, who previously worked on platform strategy at Microsoft, says the excitement around VR is warranted, though, as with every big advance in technology, the timing is less certain. “I do see VR as a fundamental platform leap, which means that we get to re-do a lot of things,” he says. “There’s a whole ecosystem that has to get built out.” But the question is, he says, “How does that platform come to fruition?”

“We’re looking for anything that can unleash VR. We don’t know what that is,” Deshpande says. “This is a brand new world, as mobile was over a decade ago.”

With high-end VR headsets set to reach consumers this year, will 2016 be the year that a virtual reality platform is capable of supporting a broader ecosystem of software, content, services, and industry-specific applications? “We actually forecast that next year is the year the platform might emerge,” Deshpande says.

Investors are wondering: how many VR units will be in the market in a year, or two? Do you count low-end devices such as Google Cardboard—essentially a pair of lenses to enable viewing of VR content on a smartphone—in the same category as the forthcoming Oculus Rift and HTC Vive? (Google announced last week that more than 5 million Google Cardboard viewers had shipped since it was introduced a year and a half ago. The company made the design available to anyone, and a number of manufacturers, including View-Master—yes, that View-Master—are making them.)

Choi says Vulcan performed “a pretty advanced, complex modeling exercise” to forecast the magic number. “Our range is somewhere between 25,000 and 300 million,” he deadpanned. “We’re pretty confident about that.”

But seriously, folks. There was consensus among these investors, who spoke as part of a day-long conference produced by the Technology Alliance, that gaming is the obvious first market for high-end VR devices. Gamers, Choi says, “are ready to get one of these things tomorrow and start using it.”

When a new platform emerges, the first wave of applications tend to be merely old apps on a new platform: “Clearly, tons of gaming stuff is going to move to VR,” Fitzgerald says. “But what’s really interesting is the second phase, when you start to figure out the new capabilities of the new platform, and start to do things we haven’t seen before.”

He’s bullish on potential commercial applications in areas such as data visualization and collaboration. One such example is a partnership between Redfin, the Seattle-based online real estate brokerage, and Matterport, allowing an immersive 3D walk-through of homes listed for sale. Sib Mahapatra, manager of strategy and new ventures at Redfin, says some 90 percent of the homes listed for sale by Redfin brokers last year were scanned with Matterport cameras. “Real estate is one of the most intuitive applications for something where the biggest value is presence,” he says.

Fortune 500 companies will have an easy time writing big checks for VR technology, Fitzgerald says. But it’s a different story for a consumer to spend thousands of dollars on first-version hardware and software. “What that consumer adoption curve is going to look like is really hard to say,” he notes.

Despite the uncertainty, investors are flocking to startups working across the spectrum of virtual and augmented reality technologies, and 2016 is already a record year, thanks to Magic Leap’s massive Series C funding round. That round by itself is more than double the $349.9 million raised across 73 investments in North American virtual reality companies in 2015, according to data from Seattle-based PitchBook. In 2014, $720.6 million was raised across 47 deals, though the lion’s share of that went to Magic Leap’s $542 million Series B round.

Deshpande says Qualcomm’s $25 million stake in Magic Leap (prior to the Series C, though Qualcomm participated in the latest round, too) was the largest single investment the corporate venture arm has made.

And more investors are chasing the opportunity. PitchBook counts 204 active VR investors in 2015 (including venture firms, angel investors, corporate VCs, and others), a 56 percent increase over 2014.

Fitzgerald says it’s still early days, and that questions about how many units will be in the market in the next couple of years miss the bigger transformation occurring. “I think people are being very short-term. The question is, What’s your timeframe? Almost any startup you look at in this, it’s a five- to 10-year investment cycle,” he says. “If you have that sort of a timeframe, I actually think it’s a great time to invest.”

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GenSpera, Pursuing Partners, Tests Toxin-Based Drug in Brain Cancer

Wed, 02/03/2016 - 16:57

Like many small biotechs, San Antonio, TX-based GenSpera has plenty of options for developing its cancer drug and limited resources to do so.

While GenSpera’s treatment, called mipsagargin or G-202, has potential to treat cancers ranging from brain to liver to prostate, the company is limited by funding. GenSpera raised $2.5 million in December, which it is targeting to help pay for an ongoing Phase 2 study for G-202’s use in glioblastoma multiforme, a fast-growing brain tumor.

So far, the study has been primarily conducted at the University of California San Diego Moores Cancer Center and is now being expanded to the John Wayne Cancer Institute in Santa Monica, CA, the company said in a letter to shareholders in January. GenSpera (OTC: GNSZ) is using the expanded study to attempt to include more patients who have a high level of an enzyme that triggers the company’s drug, which subsequently kills the tumor cells, after already finding success in those patients in early tests, says CEO Craig Dionne.

While the company has operated on a lean budget over the last few years, raising a few million dollars here and there to fund its clinical studies, Dionne says he expects the results of the coming tests will help build out the business so it can move into advanced clinical trials. Founded in 2003, GenSpera has for years been testing and seeking partnerships to develop its novel cancer treatment, which Xconomy’s Bernadette Tansey profiled in an engaging and detailed story in 2014.

“It allows us to collect more [glioblastoma multiforme] data, and especially go to the FDA and get buy-in on our clinical development plan,” Dionne says about the new funding. “We’ve been talking to potential partners for a couple of years. Scientists are skeptical folks. You walk in the door with great data, and they say, ‘Where did this come from?’ … They get to know you. Then they realize it’s real.”

If all goes well with the Phase 2 study at John Wayne, GenSpera may be looking for another larger funding round in late 2016 to pay for a randomized study for the brain cancer treatment. And, Dionne says, the company is exploring other options for the drug candidate.

GenSpera has completed a Phase 2 study for its treatment for liver cancer, which has a sizeable patient population in East Asia—700,000 diagnoses in mainland China each year, compared with as many as 13,000 annually in the U.S., Dionne says. (Statistics vary about the number of annual diagnoses; 75 percent of new worldwide liver cancer cases in men and two-thirds of the world’s new liver cancer cases in women occur in 15 Asian countries, according to a 2008 study from Pfizer.) The company is seeking a partner to help develop the treatment for the disease there, and has put development on the backburner until it finds one, he says.

GenSpera is also working on using G-202 on prostate cancer patients with highly progressed tumors. The company is beginning a Phase 2 study of at the University of Texas Health Science Center at Houston in the second quarter this year, Dionne says.

Developed by Dionne and collaborators at Johns Hopkins University in the 1990s, GenSpera’s therapy is based in a toxin, thapsigargin, which is found in a weed called Thapsia Garganica. Converting the toxin into a drug that is safe to use in the body is complicated because of its potential to destroy any kind of cells, not just tumors, as Xconomy reported in 2014. The resultant drug is based on the scientists’ chemical tinkering.

As GenSpera enters into the study at John Wayne, where GenSpera’s board member, Santosh Kesari, is the chair of the Department of Translational Neuro-Oncology and Neurotherapeutics, the company has enough funding to carry it through late 2016, Dionne says. It has raised approximately $35 million to date through the sales of equity and the exercise of warrants.

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How Scientific Social Work Helps People Flourish

Wed, 02/03/2016 - 14:25

Here’s a question for everyone who wants to change the world: Which of these innovations will have more impact on society—a first-of-its-kind experimental vaccine to prevent HIV/AIDS that’s been developed by a venture-capital-backed biotechnology company, or a big-data research study from a social work scholar that identifies the role that alcohol consumption plays in the contraction of HIV/AIDS?

My answer is both.

Each of these rigorous, cutting-edge and science-based initiatives has the potential to transform our society in a real and enduring way; each seeks to improve and save lives; and each attempts to enhance well being within an often marginalized community.

So, if this is the case, why are the experimental vaccine and the big data research study, which share the same humanistic objectives and social welfare goals, seen in a vastly different light?
Indeed, as members of what’s been called the 21st Century Innovation Economy, we are increasingly conditioned to see high-growth technology start-ups as the solution to critical and seemingly intractable problems effectively and efficiently. And, in many instances, we celebrate these groundbreaking efforts, even as they provide entrepreneurs and investors with sumptuous financial rewards.

I’m absolutely, positively in favor of this approach to innovation.

But I think there are also other valuable and complementary models that can help produce lasting—and much needed—social change so that people and communities can flourish and thrive.

One of these innovation models—scientific social work—has a particularly good track record when it comes to advancing leading-edge solutions for significant social problems such as poverty, child safety and security, healthy aging, emotional well being, economic empowerment, gender equity, and access to health care and financial services. These problems deeply affect all of us, but especially those in under-served and under-represented communities worldwide.

Based on collaboration involving trained social work scholars and the most accomplished outside talent from fields as diverse as technology, medicine, and business, scientific social work creates a unique human capital hybrid to tackle persistent, powerful, and pressing social problems. In an increasingly connected world with complex and interdependent challenges, solutions that work require a collective response that works in close collaboration with those most affected by the problem.

Data-driven scientific social work—an integral part of the University of Washington’s innovation imperative—also has a sharply etched bottom line, just as venture-capital-driven innovation does.

But the return on investment with scientific social work isn’t dollars and cents. It’s collective impact. That means turning scholarly inquiry and research insights into scalable and sustainable change that can be seen, felt, and experienced by the people in greatest need.

And, given the events of the first 15 years of this century, it’s abundantly clear that there are plenty of people in need of the innovative change that scientific social work can accelerate.

  • After 9/11, devastating weather events, and wars in Iraq and Afghanistan, many members of our society are struggling with trauma and loss. Assisting victims of trauma is not new, but better understanding how trauma affects individuals, families, and communities is essential in order to deliver state-of-the-art mental health services on a large scale to people who are wrestling with painful personal experiences.
  • The psychological after-shocks of the 2008 financial meltdown and recession also linger for many people in our country. Unresolved depression, anxiety, stress, and hopelessness persist, especially among those who lost their homes, paychecks, and optimism about the future. Fully understanding these feelings of economic instability is crucial if we’re going to develop innovative behavioral therapies, not to mention more responsive public policies, to help this displaced cohort.
  • For their part, children continue to suffer in our society. But the encouraging news is that there are a number of innovative research studies underway from science-based social work scholars that could help us formulate cutting-edge solutions for our troubled and at-risk youth. These studies range from suicide prevention work that reduces the risk of school violence to providing effective emotional support for children of incarcerated parents so that they can thrive as adults.

Looking forward, there is so much more we need to know—and do—in scientific social work to help people flourish everywhere. Social work expertise is critical to solving many of our most pressing problems. When we effectively lift up the lives of the most disadvantaged, everyone in society benefits. We become stronger in our communities and in our country.

Whether it’s broadening the definition of family, increasing our knowledge about genetics, neurobiology and human development, wrestling with the dynamics of globalization, comprehending the real impact of technology, or deepening our understanding of social intolerance and injustice, the most vulnerable members of our communities need our best breakthrough thinking to fulfill their promise and potential as individuals in the 21st century.

Editors note: This essay is one in an occasional series appearing in the Xconomist Forum, written by contributors selected by CoMotion, the University of Washington’s innovation hub. To learn more from UW innovators, visit uw.edu/innovation.

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Ex-Tech CEO Steps Out of Retirement to Reinvent Medical Walker

Wed, 02/03/2016 - 09:00

Dave Purcell meant to stay retired after he ended his 23-year stint with Encad, a San Diego company he co-founded to manufacture large-format inkjet printers capable of printing poster-size images and banners. Purcell gradually eased out of the business after Eastman Kodak (NYSE: KODK) acquired Encad in 2002 in a deal that was valued at $25 million at the time.

But after watching his wife Jean fall a number of times while using a conventional walker, the former electronics industry CEO felt personally compelled to start another company. “I watched her with a walker, and I thought, ‘Hell, I can do better than that,” Purcell recalled.

At the age of 77, Purcell is now taking the wraps off ProtoStar—a San Diego startup developing a new type of medical walker. ProtoStar plans to introduce its first product—the LifeWalker Upright mobility device—later this month at a meeting of the American Physical Therapy Association in Anaheim, CA.

The LifeWalker is designed to let users stand upright and walk safer, longer, and more comfortably than they can with conventional walkers and canes. ProtoStar plans to price the LifeWalker at almost $1,800, according to a spokesman for the company.

“Where we’re headed, though, is to a smart walker,” Purcell said yesterday. He didn’t provide many details, but said artificial intelligence would be integrated into future generations of the LifeWalker.

Dave Purcell

ProtoStar estimates the global market for mobility products is roughly $4 billion, with more than 8.5 million devices sold in 2013. According to the company, the total cost of fall injuries was $34 billion in 2013, and is expected to rise to nearly $68 billion by 2020.

In the United States, ProtoStar says the risk of injuries caused by falls also is increasing as baby boomers age. One-third of those who are over 65, or more than 12 million elderly Americans, fall each year, along with falls related to obesity, hip and knee replacements, spinal cord injuries, neurological, gait, and orthopedic disorders.

While testing LifeWalker prototypes, Purcell said he also has been encouraged to develop smaller versions of the device for children with cerebral palsy and spina bifida.

Purcell founded ProtoStar in 2014; he provided much of the necessary funding, but also raised money from a few outside investors. While ProtoStar has only taken the first steps in targeting the mobility market, Purcell already has recruited several prominent San Diego tech and life science leaders to serve on the company’s board.

The list includes Peter Farrell, the founder and chairman of Carlsbad, CA-based ResMed (NYSE: RMD); Dr. Steven Garfin, a distinguished professor and chairman of the department of orthopedic surgery at UC San Diego; Drew Senyei, managing director of San Diego’s Enterprise Partners Venture Capital; and Craig Andrews, a corporate lawyer in San Diego who has worked extensively with local startups focused on the life sciences and medical devices.

ProtoStar LifeWalker

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Time to Ease On Down the Road

Wed, 02/03/2016 - 05:00

It’s been a real pleasure writing my guest op-ed pieces for Xconomy for the past six years. I’ve enjoyed sharing my thoughts about a wide spectrum of biopharma topics, and appreciated the feedback I received whether you agreed with my views or not. However, it’s time for me to move on. I’ve already started posting articles on my new blog, BioPharma Observer. This change will enable me to try out some new approaches and formats that will not easily fit into more traditional online or print media. Those of you who are interested in reading my pieces can find them on my website or follow me on Twitter @lymanbiopharma. I’ll be sending out Tweets whenever something new is posted.

I’d like to thank Ben Fidler for all of his editorial assistance, Alex Lash for his encouragement, and Luke Timmerman for his help in getting me started down this path in the first place. This is a very exciting time in biopharma. The scientific underpinnings of the industry are advancing rapidly, and the combined efforts of a very large number of smart people will undoubtedly lead to future successes in the clinic. The scientific, political, and financial challenges ahead are many, but I am very optimistic that our future healthcare needs will be met by an ever-widening net of progress and availability.

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SprinkleBit Raises $10M, Relocates from San Diego to New York

Tue, 02/02/2016 - 13:51

SprinkleBit, a social networking platform for stock trades founded in San Diego at least five years ago, has raised $10 million in new funding from GTC, a newly formed private equity firm in Baku, Azerbaijan, according to founder Alexander Wallin.

The deal will allow SprinkleBit “to exponentially grow our user base and generate some substantial cash flow,” Wallin explained in an e-mail yesterday. SprinkleBit, which currently has 13 employees, also plans to move all of its operations to New York City, and plans to add another seven staffers there.

The decision to relocate was based mostly on “operational efficiency,” Wallin wrote. “The market opens [at] 6:30am PST and it’s hard to be prepared, but the most important point is our increased presence in Europe. We need to have more hours overlapping to conduct scrum meetings, etc.”

In an interview just over a year ago, Wallin said one of SprinkleBit’s unique features was the Value Prediction Index (VPI) that he developed as an undergraduate at UC San Diego. The VPI algorithm uses recent stock trades made through SprinkleBit to score each stock based on whether the user community thinks its price will increase. Each user also gets scored according to how accurately they predict future prices.

Initially, SprinkleBit operated mostly as a Web-based social network for sharing stock tips, educating investors, and crowd-sourcing investor insights. The startup is not a securities broker dealer, and began to offer users access to brokerage services in late 2014 through a trading platform operated by Equinox Securities.

Over the past year or so, SprinkleBit has expanded into Europe, improved its Web design, added premium services for paid subscribers, and most recently, launched an instant messaging “chat” service. The company now has about 10,000 users in the United States and abroad.

Wallin said he connected with GTC through a Swiss banker “who has been looking for a SprinkleBit for a while and really liked it.”

Wallin said GTC is owned by investors from Baku, Geneva, and London. GTC is in its IPO process and will be listed this month on the Baku Stock exchange (BSE), and plans to be listed in Hong Kong (SEHK) and Frankfurt (FWB) exchanges later this year. “The Baku stock exchange (BSE) is among the fastest-growing stock exchanges in Europe,” Wallin wrote. The “BSE attracts a lot of capital made from the old oil industry which has lead to an increased interest among European companies to be listed there.”

The $10 million brings SprinkleBit’s total funding to $13.7 million, and will be allocated over the next six months, Wallin said. The capital will enable the company to start a marketing campaign, “as our platform is fully operational on both iOS and the Web with social, education, premium, and brokerage all playing together,” Wallin wrote. “Additional funds will be spent on growing our [developer] team to include Android as well.”

He predicts “SprinkleBit will connect millions of people around the world and aims to become their one stop shop for all investing related activity, including; discussing, learning, and investing. We showed some really impressive numbers last year with a median [investment] return of 35 percent among our community, while [the] S&P 500 traded flat.”

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PTC Sketches Vision of Augmented Reality for Big Companies

Fri, 01/29/2016 - 18:33

Augmented reality, like its sister technology, virtual reality, is still in its infancy and has yet to live up to the hype. For many consumers, the most salient example of AR to date was a high-profile flop: Google Glass.

AR boosts a person’s experience of the surrounding environment through computer-generated elements, like images superimposed on a screen, that blend the real world with the virtual one. The experience can be delivered by high-tech glasses and other wearables, or simply through a smartphone or tablet screen. Gaming and consumer marketing are among the most prominent arenas for the technology so far.

But augmented reality could be poised to have an impact on another area: enterprise businesses, particularly the design, manufacturing, and maintenance of physical products. At least, that’s the vision that was presented Thursday at a flashy event in downtown Boston put on by PTC (NASDAQ: PTC).

“AR is already changing how we play,” said PTC chief executive Jim Heppelmann (pictured above). “It’s about to completely disrupt the way that we work.”

Over the past 30 years, Needham, MA-based PTC built a billion-dollar business mostly focused on computer-aided design software and helping to manage and service products. More recently, PTC has tried to reposition itself as an Internet of Things (IoT) company. It has spent about $500 million since late 2013 to acquire companies that help develop software to connect devices (ThingWorx, Axeda, and Kepware), and help manage the flow of data from connected devices (ColdLight).

PTC branched into augmented reality with its $65 million purchase of Vuforia from San Diego-based Qualcomm (NASDAQ: QCOM) in October. More than 20,000 developers worldwide have used Vuforia’s software to create more than 25,000 AR apps for phones, tablets, and smart eyewear. But while those apps have mostly been used by consumer brands like McDonald’s, HP, and Samsung to market their products, PTC used Thursday’s event to showcase how it’s applying Vuforia’s technology to manufacturing and servicing products in the field.

PTC invited more than 100 people to the event at the Revere Hotel, which was also broadcast online to more than 14,000 people worldwide, including Vuforia developers. The gathering featured demonstrations by several PTC customers, including Sysmex, a maker of diagnostic products and clinical lab testing devices; energy management company Schneider Electric; and Austrian motorcycle maker KTM.

KTM employees showed how AR software on a tablet could guide a technician to fix a problem with a bike. Text at the bottom of the screen gave step-by-step directions explaining which parts to unscrew and remove in order to reach the malfunctioning part. Then it explained how to troubleshoot the issue. Along the way, computer-generated images of the various parts were superimposed over the live image of the motorcycle being displayed on the screen.

AR will “allow technicians to perform service faster, even with none or little experience with our bikes,” said Jens Tuma, KTM’s head of customer service. “It will help us deliver a more consistent level of service around the globe.”

If such technology can make it easier to fix problems with machines, it should mean manufacturers and customer service providers can “send fewer technicians on fewer and shorter service calls,” Vuforia general manager Jay Wright said.

The software could also reduce the need for, or even replace, printed user manuals, Wright said. “It will also decrease the need for training,” he added.

On the manufacturing floor, AR could be used to guide workers through their tasks, Heppelmann said.

And as industrial machines get connected to the Internet, AR programs could create a digital dashboard tracking the status of each device and notifying staff when, say, it needs a new battery or requires maintenance, he said. This would allow a factory manager to more conveniently keep tabs on machines’ health while walking the manufacturing floor. “Why put IoT dashboards back on a computer screen in the office?” Heppelmann said.

There are still kinks to be worked out. For example, PTC said it has tried to make it easier to create and drop in the content needed to make AR apps useful (think digitizing the information in a printed product manual).

AR programs also need … Next Page »

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CRISPR: The Path to Clinical Trials

Fri, 01/29/2016 - 05:00

If you have read a newspaper lately, there is a good chance you have heard about CRISPR-Cas9, the versatile gene editing technology. Over the past several months, legal battles over intellectual property, ethical concerns over editing of the human germline, jaw-dropping partnerships with pharma, and talk of IPOs have crescendoed to a steady roar, reaching beyond the biotech community and into the popular press.

Yet amid all the noise about CRISPR, there remain several major technical challenges that scientists at the leading CRISPR companies—Editas Medicine, CRISPR Therapeutics, and Intellia Therapeutics—are working furiously to address. Their success will determine whether CRISPR lives up to its hype and, crucially, whether patients with severe, intractable genetic diseases will benefit.

With any novel technology like CRISPR, there exist uncertainties about safety. Safety is an even greater uncertainty in this case because of prior experience from the closely related field of gene therapy. Gene therapy involves providing a functional copy of a gene to diseased cells, while gene editing involves editing the existing genome in those cells. In 1999, Jesse Gelsinger, a patient with Ornithine Transcarbamylase Deficiency, tragically died from an immune response to the viral shell used to deliver an experimental gene therapy. Separately, in 2002, the first of several gene therapy-treated children developed deadly leukemia caused by insertion of a therapeutic gene into a cell’s DNA in a way that turned on one of the cell’s pro-cancer genes. After these adverse events and the subsequent shutdown of multiple clinical trials, the excitement over gene therapy came crashing down.

Today, scientific and business leaders in gene editing are hoping to avoid the early missteps that set the field of gene therapy back by several years. One of the greatest concerns is the possibility of off-target activity—where CRISPR edits unintended genes and may produce carcinogenic mutations. Editas Medicine, in its S-1 disclosure to the SEC, acknowledged that its researchers “cannot be certain that off-target editing will not occur in any of [their] planned or future clinical studies.”

John Leonard

Yet the pressures on the leading CRISPR companies are tremendous, pushing companies to commercialize their technologies within the next few years. John Leonard, chief medical officer of Intellia Therapeutics, likens the competition to a “footrace” in which none of the major companies has a clear lead. Ali Behbahani, a board member at CRISPR Therapeutics and partner at New Enterprise Associates, states that the “time pressures” might push some companies to move to the clinic before the technology is ready. Katrine Bosley, CEO of Editas, has committed her company to human trials of CRISPR by 2017.

Adding to the time pressure are the expectations of investors. Editas Medicine filed an S-1 with the SEC this month in preparation for an IPO, and Intellia Therapeutics appears close behind, recently bringing on “crossover” investors like Fidelity that typically invest in private companies shortly before they go public. Public investors tend to demand rapid results. Only CRISPR Therapeutics has taken a funding approach that seems to rely primarily on private investment, recently signing a deal with Bayer worth $335 million, following a $105 million deal with Vertex.

All three companies are devising means to overcome some of the safety challenges with CRISPR. Feng Zhang, a scientific founder of Editas Medicine, has worked on creating a modified Cas9 enzyme that more reliably targets the desired location on the DNA sequence.

Leonard says that Intellia has focused on improving the guide RNA that directs the Cas9 to the site of action. “We’ve demonstrated that there are very good guides that are completely clean,” he says.

Simeon George

Simeon George, a board member of CRISPR Therapeutics and partner at SR One, says that CRISPR Therapeutics has been devoting considerable energy to honing computer algorithms that will identify areas of potential off-target activity. “This is something that is going to differentiate us,” he says.

Another major challenge facing these companies is regulatory approval. The FDA will be taking a close look at any applications to test the therapy in humans. All the companies are hoping to benefit from the precedent set by companies that have been successful in related fields. Sangamo BioSciences has a Phase 2 trial and two Phase 1 trials in humans underway using Zinc Finger Proteins (ZFPs), another approach to gene editing that was discovered before CRISPR but is generally seen as more cumbersome and less versatile. Reassuringly, Sangamo has not reported any major adverse events in these studies.

Which patients are likely to be the first beneficiaries of CRISPR? Leonard says that he “divides the world into cells you can take outside the body and those you can’t.” For example, blood cells can be removed from the patient, treated with CRISPR, and then infused back into the patient. This approach has lower risk of adverse effects because only blood cells will receive the therapy and those cells can be studied carefully before being infused. Patients with sickle cell disease and other genetic diseases of hemoglobin may be the first to receive treatment. “Sickle cell disease is one of the ex vivo [outside the body] applications that we are most excited about,” says George.

Another application outside the body is in CAR-T cells, white blood cells that are engineered to fight cancer. CRISPR could permit CAR-T cells from one donor to be given to many different patients, or improve the safety of the CAR-T cells, says Leonard. Intellia has entered a partnership with Novartis to pursue these possibilities.

Editas has taken the ambitious approach of focusing primarily on treatments inside the body. The company’s lead program will be in Leber congenital amaurosis, a rare congenital cause of blindness. That therapy would be injected directly into the eye to treat defective cells in the retina.

Ultimately, all three companies hope to have therapies both for use inside and outside the body. CRISPR Therapeutics is pursuing therapies for cystic fibrosis with Vertex, and its deal with Bayer is explicitly intended for the development of systemic therapies. Intellia has created two divisions, one dealing with therapies inside the body and the other for therapies outside the body. In its S-1, Editas identified programs in hemoglobin diseases, CAR-T, muscular dystrophy, and cystic fibrosis, among others.

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West Coast Biotech Roundup: Gilead, Adicet, Otonomy, Fate & More

Fri, 01/29/2016 - 04:55

The only major Republican presidential candidate who didn’t show up for last night’s debate was front-runner Donald Trump. He also made national news this week by announcing his intent to let Medicare negotiate drug prices—a distinctly un-GOP-like position.

The drug-price debate reverberated on the West Coast, too, as the Massachusetts attorney general threatened California’s Gilead Sciences over the cost of its hepatitis C drugs. Another way to bring down drug prices: Develop cheaper versions of expensive biologic drugs. On that front, the FDA said it would give Amgen a yea or nay decision by late September whether to allow its knockoff of the world’s best-selling drug come to market.

Before you knock off for the weekend, how about a quick look back at the week? Let’s get to the roundup.

—Former Kite Pharma (NASDAQ: KITE) CEO Aya Jakobovits launched Adicet Bio, a new Menlo Park, CA-based startup developing immunotherapies for cancer and other diseases. The company has raised $51 million from OrbiMed Advisors, where Jakobovits is a venture partner, Novartis Venture Fund, and Pontifax, and has acquired Israel’s Applied Immune Technologies. Adicet will use the Israeli company’s antibody technology to modify human immune cells to attack tumors by latching onto protein fragments on the tumor cell surface.

—A new front opened this week in the campaign to combat high drug prices. The Massachusetts Attorney General Maura Healey threatened legal action against Foster City, CA-based Gilead Sciences (NASDAQ: GILD) over the high price of its hepatitis C medicines. In a letter made public Wednesday, Healey wrote that the high price of Sovaldi ($84,000 for a 12-week course of treatment) and Harvoni ($94,500) “may constitute an unfair trade practice in violation of Massachusetts law.”

—Gilead also saw a change at the top. John Martin, CEO for two decades, will become executive chairman and his longtime right-hand man, COO John Milligan, will take over as CEO.

—Biopharma consultant and former Xconomist columnist Stewart Lyman weighed in this week on the drug pricing fight with this essay on his website. You can read Lyman’s Xconomy commentaries on drug pricing here and here.

—Beleaguered diagnostics firm Theranos of Palo Alto, CA, ran into more trouble this week. The Wall Street Journal reported that federal inspectors found serious problems at the Theranos blood-test laboratory in the San Francisco Bay Area. The pharmacy chain Walgreens, an early partner of Theranos, then said it would not allow blood tests performed at its stores to be analyzed in the Theranos Bay Area lab. Walgreens also said it would stop offering the testing service at its Palo Alto store. Theranos also has a lab facility in Arizona, where Walgreens stores continue to offer Theranos tests.

Human Longevity, the San Diego startup founded by human genome pioneer J. Craig Venter and Robert Hariri, has agreed to buy LifebankUSA, a specialist in placental and umbilical cord blood banking and its related biomaterials business. Financial terms of the deal were not disclosed.

—Otonomy (NASDAQ: OTIC), the San Diego firm developing treatments for diseases and disorders of the ear, said its injectable drug candidate for treating Ménière’s disease, OTO-104, also could protect cancer patients from hearing loss caused by certain chemotherapy treatments. According to Otonomy, hearing loss has been reported in up to 90 percent of children and young adults who are treated with platinum-based chemotherapies like cisplatin. Otonomy said it expects to begin a Phase 2 feasibility trial of OTO-104 at cancer centers later this year.

—MannKind (NASDAQ: MNKD), the Valencia, CA-based maker of an inhalable insulin treatment with disappointing sales, has been working with investment bankers on strategic options that could include a possible sale, according to a Reuters report that cited unnamed sources.

—The FDA accepted a marketing application from Thousand Oaks, CA-based Amgen (NASDAQ: AMGN) for a biosimilar to adalimumab (Humira), AbbVie’s blockbuster drug for several autoimmune diseases. The agency promised to … Next Page »

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Nextech Adds San Diego’s Supramed to its Medical Practice Business

Thu, 01/28/2016 - 10:33

Nextech, a company in Palm Beach, FL, that develops software used to manage physicians’ medical practices, has acquired San Diego-based Supramed, which specializes in medical practice management software for plastic surgeons. Financial terms were not disclosed.

Supramed CEO Bob Nascenzi was upbeat about the deal yesterday, saying Nextech plans to expand Supramed’s development team in San Diego as it expands its cloud-based software. By hiring six software developers over the next six months, Nascenzi said Supramed would double its current headcount—and he counts that as a victory.

“Here’s a tech company that’s being bought in San Diego, but rather than closing us down, they want to build the company in San Diego,” Nascenzi said. “I see so often that we’re like a farm club city here. As soon as something gets bought, [the buyers] want to move it out of town.”

Nascenzi said he also is encouraged by the fact that Nextech is a portfolio company of San Francisco-based Francisco Partners, a private equity firm focused solely on technology and technology-enabled service businesses. It has $10 billion in total assets. “Nextech was the buyer, but all our negotiations were with Francisco Partners,” Nascenzi said.

Nextech, founded in Dayton, OH, in 1997, says it has accumulated a worldwide client base of more than 7,000 physicians, managing an excess of 40,000 office staff members across three main specialties: plastic surgery, dermatology, and ophthalmology. Nextech moved its headquarters to Florida in 2006.

Supramed was founded in 2011 by two San Diego plastic surgeons, Robert Pollock and Raluan (Ron) Soltero, who realized the specialized nature of their practice required a more customized software management system than what was available. Nascenzi said he joined as CEO in 2014, and set out to raise capital, develop a go-to-market plan, and recruit a chief technology officer.

The company has raised about $1.6 million over the past five years, Nascenzi said.

“Going forward, the team here is going to be focused on the practice management system for all specialties,” Nascenzi said.

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Three Things To Know About Doing Business in California

Thu, 01/28/2016 - 07:00

Since the 1849 gold rush, California has had a reputation as a great place to seek—and find—your fortune. The Golden State is home to the Golden Gate Bridge, the Golden State Warriors and, in Silicon Valley, golden opportunities. But, as you might suspect, California sometimes operates like its own country, with laws that aren’t like anyone else’s.

Here are three areas where California law puts a unique twist on business. If you’re running a startup here, or if you’re thinking of doing so, you’ll need to pay close attention to these quirks:

It’s All About The Equity: I often counsel foreign startups eager to enter the California marketplace, and they’re always surprised by the perks that Silicon Valley workers want. No one—and I mean no one—is interested in a company car. But stock options? Bring ‘em on.

It’s common in Silicon Valley to grant options or shares to advisors, early employees, key contributors, including landlords and banks. Many want to cash out and use the windfall to buy a home or just pay the rent in the country’s most costly real estate market.

California is one of the few states that carefully regulate filing requirements for stock plans. The state can levy fines on companies that fail to file or remain in compliance. Founders must also comply with federal regulations, spelled out in the scintillating Internal Revenue Code. It requires that deferred compensation be paid by March 15 of the following calendar year, except for stock options that are exempt, provided they are granted at fair market value. This clearly isn’t something you want to puzzle out on your own. Consult a lawyer and valuation experts to be sure you’re not running afoul of either California or federal law. Or both.

Goodbye, Colleague, Hello Competition: So many potentially brilliant ideas are erupting in Silicon Valley that it’s no wonder this area is prone to earthquakes. Smart and ambitious people think big, and sometimes those big thoughts happen while they’re working for someone else—like you.

Unlike many other states, California law generally bars post-employment non-compete agreements. They’re against public policy and ultimately unenforceable here, except in narrow circumstances, so there’s really nothing you can do to prevent your employees from jumping ship and signing on with your biggest competitor.

You also can’t stop them from leaving to launch their own business, even if it’s in the same space as yours, provided they haven’t hijacked your vital intellectual property or trade secrets when they do so. (Of course, before their first day of work, you did have them sign over to the company all rights to anything they developed on the job, right?) They also must have developed their product, software or ideas on their own time with their own resources.

California law offers few protections in this area, but I can suggest a strategy that offers some defense against competitors who rise from your ranks: Insist that employees sign a non-compete agreement that is enforceable in states that permit it. This could deter a subset of your team from setting up shop in Austin or Boston, because Texas and Massachusetts are less restrictive with respect to non-competes.

Free Labor, Costly Problems: California has always attracted innovators, whether it’s O’Neill surfboards or Apple computers. Tech companies large and small are deluged with requests from college students who want to breathe that heady startup air. They’re so eager for the experience that they’re willing to “intern” for free. It’s tempting to take advantage of that kind of enthusiastic workforce, especially in costly California. The State’s minimum wage rose from $9 per hour to $10 an hour on Jan. 1. The hourly wage in San Francisco jumps to $13 on July 1 from $12.15.

College students and new grads may insist they’re thrilled to work as unpaid interns, but you must proceed with caution. If they’re doing routine office tasks, such as packaging products for shipment, you must pay them the mandated minimum wage. If they’re getting college credit for skilled work—think beta-testing software or developing a marketing campaign—you should have them acknowledge that they know they are not employees and won’t claim to be. Unfortunately, even this precaution is no guarantee against being sued later for back pay.

And an intern could, in theory, attempt to charge you for a detailed analysis he or she spent months preparing for your team. Protect your company’s interests by requiring all interns to sign paperwork affirming that everything they invent or develop during their time with you belongs to your business alone.

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